Connecting Entitlement Reform to Immigration Reform

I was born in 1946, just when the boomer wave began. Bill Clinton was born that year, too. So was George W. Bush, as was Laura Bush. And Ken Starr (remember him?) And then, the next year, Hillary Rodham was born. And soon Newt Gingrich (known as “Newty” as a boy). And Cher (Every time I begin feeling old I remind myself she’s not that much younger.)

Why did so many of us begin coming into the world in 1946? Demographers have given this question a great deal of attention.

My father, for example, was in World War II — as were the fathers of many other early boomers. Ed Reich came home from the war, as did they. My mother was waiting for him, as were their mothers.

When it comes down to it, demographics is not all that complicated.

Fast-forward. Most of us early boomers had planned to retire around now. Those born a few years later had planned to retire in a few years.

But these plans have gone awry. First, boomer wages didn’t rise as fast as we expected they would. In fact, over the last thirty years the median wage has barely budged, adjusted for inflation.

As a result, most of us haven’t saved as much as we’d hoped.

Then employers scaled back our pensions. Instead of the predictable monthly benefits many of our parents got when they retired, we received “defined contribution” plans – basically, do-it-yourself pensions. Some employers initially offered to match what we socked away, but those employer matches often shrank to the vanishing point.

We nonetheless took comfort from the rising prices of our homes, and assumed they’d become modest nest eggs when we sold them and bought smaller places for retirement.

But then the housing bubble burst.

Meanwhile, whatever we’d managed to sock away in the stock market lost years of value.

We assumed we’d at least have Social Security and Medicare. After all, we’ve been paying into both programs for years.

Yet both are now being eyed by deficit hawks who say the only way to avoid large and unsustainable budget deficits in future years is to limit these programs.

For example, Erskine Bowles and Alan Simpson have just offered another of their deficit-cutting plans — paring back Social Security’s annual cost-of-living adjustment and reducing Medicare by squeezing suppliers and cutting benefits for higher-income retirees.

So are the boomers doomed?

Not necessarily. One possible response to the aging of America, not yet on the table: Expand the number legal immigrants coming to America.

As I’ve noted before, the biggest reason Social Security and Medicare are projected to cost so much in future years is because America is aging so fast.

It’s not just that so many boomers are planning to retire, and their bodies will wear out. It’s also that seniors are living longer. And families are having fewer children.

Add it all up and the number of Americans who are working relative to the number who are retired keeps shrinking.

Forty years ago there were five workers for every retiree. Now there are just over three. By 2025, if present trends continue, there will be only two workers per retiree. There’s no way just two workers will be able or willing to pay enough payroll taxes to keep benefits flowing to every retiree.

This is where immigration comes in. Most immigrants are young because the poor countries they come from are demographically the opposite of rich countries. Rather than aging populations, their populations are bursting with young people.

Yes, I know: There aren’t enough jobs right now even for Americans who want and need them. But once the American economy recovers, there will be. Take a long-term view and most new immigrants to the U.S. will be working for many decades.

Foreign-born workers are now 15 percent of the nation’s workforce. At the present rate of immigration, between now and 2050 immigrants and their children are projected to account for nearly all the growth of the American population under the age of 65.

Immigration reform is already on the national agenda, but we’ve been focusing on only one aspect of it – how to deal with undocumented workers.

We need to think more broadly, and connect the dots. One logical way to help deal with the crisis of funding Social Security and Medicare is to have more workers per retiree. And the simplest way to do that is to allow more immigrants into the U.S.

Immigration reform and entitlement reform have a lot to do with one another.

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. Robert Reich's new film, "Inequality for All" is available on DVDand blu-ray, and on Netflix in February.

Reich assumes that we either do, or must, run Social Security as a Ponzi pyramid - always requiring ever more young suckers to buy in at the bottom. The problem with this argument is that, from the viewpoint of SocSec beneficiaries, what counts is what resources society can and does allocate to them, not whether those resources are created by lots of low-paid toilers or fewer high-paid workers, or even by a nigh-totally automated system where very few people need actively work more than a few hours per week.

Even granting Reich his Ponzi assumption, what his argument fatally fails to make clear is just how will importing more youth magically create more jobs for youth than we have now. All he can say is that - without giving any reason - 'eventually' the economy must 'recover'. How soon is 'eventually'? Why need that 'recovery' create even the jobs our present youth can't get, let alone jobs for extra youth?

There is another argument - dubious but maybe correct and anyhow interesting - that Reich COULD have - but didn't - give in favor of certain kinds of immigration and its possible help to cover Social Security. Namely, arguably certain groups of migrants are inherently more dynamic and entrepreneurial and job-creative than our economy now is on average. In other words, we could use these migrants to rev up the economy to a faster rate of climb. Does any reader here know of any identifiable and infallible such group of potential migrants?

Did Reich really write this article? I've read him for a long time now and it just doesn't seem logical, because it is such a socially irresponsible answer to the situation. Does he have his tough firmly implanted into his cheek? Kicking the can down the road is such right on thinking with the status quo that it does not seem possible that it came from this site. I don't appreciate this editorial at all.

Dear Mr. Reich, you are counting on the economy recovering in the old way of days , years that were long ago , and the economy will not.

You are talking of nations..this particular time, you are talking of the U.S. adopting all these low level educated individuals that number well into the high millions while at the same time the U.S. is no longer attracting the well educated individuals . Instead, the well educated scientist and etc. are going to other nations taking the few remaining job openings. Even the top scientist, and etc. are having a very difficult time finding employment full time and experiencing lay offs world wide.

At any given time rather now and/or in the future this will remain true, there are only so many jobs available in this world for any country at any one time. The people out populate the jobs. You are now looking at a society that more of the jobs are being turned over to computers and robotics with robotics being on the fast rise. This in turn will have the cause and effect of more job loss for humans. We have out smarted ourselves world wide of available jobs for humans.

Do you realize that the majority of people in Mexico are middle class , where as the middle class of the U.S. is falling away into the poor category? Do you realize that Mexico is a very rich country with natural resources including oil? As a matter of fact Mexico is currently approaching hitting the oil market / producing. Do you realize that the U.S. sends billions of dollars yearly and no one from the U.S. accounts for where those dollars are spent? The government in the U.S. realizes that the billions of dollars sent yearly are not reaching the poor people and instead is being held up within Mexico's own immense corrupt government officials and the few that are wealthy that control the monies.

No, you are not creating more wealth for the social security /Medicare programs. all that you are producing is driving the U.S. into further decline. Mexico is not the only immigrants that we take in and the flow of immigration needs to be stopped altogether. AT one time for the U.S. it was a great thing to take in the poor of all nations , but not any longer.

All forms of monies going to Mexico needs to be stopped immediately if we are accepting all these immigrants. The bottom line, more jobs are not being produced for the masses of people, instead immense debt is being created within the U.S. that is already bankrupt.

When will the U.S. realize/learn the U.S. can not be the baby sitters of the world? We need to back up and take care of our own in which we are not doing.

People can not longer look to God and /or any other religion belief that they may hold to save us... We have to start using our brains, start researching the facts ourselves, stop with all this crazy ideas that the government wants to shove down our throats and to accept as the gospel... WE are failing as a nation and we must save ourselves instead of looking to government to do it for us.

I am surprised that Robert Reich takes this position. It is only the industrial farms and corporations which (not "who") want to keep wages low and oppose even $9 an hour, and it is immigrant-pandering for vote. Supply and demand will raise the wages. The US does NOT have resources to support 400 or 500 or a billion people at our "standard" of waste. Where is the water in the southwest, the willingness to halt agri pollution down the Mississippi to the Gulf, the bauxite, etc etc. R Reich should log on to www.NumbersUSA.com

If we need more "workers" to shore up social security, why not create jobs for the PEOPLE WHO ARE ALREADY HERE?

There are already too many people chasing too few jobs, and too little demand [for goods and services that would create more jobs] because jobs are scarce and wages are low. Permitting "new workers" to emigrate just adds to both of these problems.

Why are the unemployed in America less deserving of programs to create jobs for them [and shore up the education and training that will make them better equipped for jobs] than folks who want to emigrate here?

The primary cause of inequity and the woes of humanity typically is there being too many people for too few resources. Suggesting that the solution to any of mankind's and civilization's problems is 'more people' is just plain old short sighted living in a bubble stupidity.
The only beneficiary of 'more people' are the manipulators of the resources, not the people themselves.

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